Business & StartupOPEX Modeler
Business Operating Cost Calculator
Calculate monthly and annual operating expenses (OPEX) by aggregating fixed overhead with variable revenue-dependent costs.
Total Business Operating Cost Formula
Total Operating Cost = (Rent + Utilities + Salaries + Software + Marketing + Admin) + (Monthly Revenue × Variable Cost %)- Fixed Operating Expenses: Recurring costs incurred regardless of sales volume (facility lease, core salaries, SaaS, insurance).
- Variable Operating Expenses: Costs that scale directly with transaction volume (credit card processing fees, packaging, shipping supplies).
Step-by-Step Worked Example
Scenario: A company with $20,000/mo in fixed overhead and 10% variable costs on $50,000 monthly sales
Calculation Steps:
- Monthly Fixed Costs = $20,000
- Monthly Variable Costs = $50,000 × 0.10 = $5,000
- Total Monthly Operating Cost = $20,000 + $5,000 = $25,000
- Annual Operating Cost = $25,000 × 12 = $300,000
- Operating Expense Ratio = ($25,000 / $50,000) × 100 = 50.0%
Result: Total operating costs are $25,000/month ($300,000/year), representing an Operating Expense Ratio of 50.0%.
How to Use This Calculator
- 1Enter all monthly fixed operational expenses (rent, salaries, software, marketing).
- 2Input projected monthly revenue and variable fee percentage (e.g., 3-5% for credit card processing).
Assumptions & Limitations
- Operating costs exclude Capital Expenditures (CapEx) and income taxes.
- Fixed costs are assumed regular across a 12-month annualized horizon.
Frequently Asked Questions
What is an Operating Expense Ratio (OER)?
OER is total operating expenses divided by gross revenue. A lower OER indicates higher operational efficiency and greater bottom-line profit margins.
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